Brexit didn't cause Britain's skills shortage. It exposed it

The Sterling Choice is a recruitment company set up in 2012. A majority of its business comes from food and beverage manufacturing – recruiting for the initial stages of harvesting or processing of meat, all the way through to placement on store shelves, with clients including the likes of M&S and Morrisons.

This visibility of almost all stages throughout the supply chain has given the company’s co-founder Lukas Vanterpool a first-hand look at the Brexit decision’s effect. “I remember speaking to a lot of our customers at the time,” he recalls. “The scariest part is nobody had a clue what was actually going to happen or what to expect.”

Many of the company’s customers were getting their ingredients from the EU. After the referendum, they had to hire completely new teams or create new departments to help with the regulation side of sourcing from the continent.

Vanterpool and his team at The Sterling Choice noticed a difference straight away in how customers approached hiring. Before, if you spoke to a good candidate, there were endless opportunities. Companies that weren't even actively hiring at that time were in a position to take people on because they always wanted to secure future talent. But after the vote, the mindset changed.

“Our customers second- or third-guessed every candidate they looked to bring in,” he says. “Margins got squeezed, not because of the lack of talent, but due to the rising costs with ingredients, whole supply chain piece, logistics, all of that.”

The false economy of DIY hiring

That, in turn, affected the bottom line of The Sterling Choice, which today serves clients in the UK, UAE and across the US. Many clients implemented a freeze on using external agencies and went in-house. However, this may not be the cost-cutting exercise they may had hoped for.

Vanterpool gives an example of an engineer – a position which accounts for 75 to 80 per cent of placements from the company’s UK operation: “It's very easy to sit there and think, ‘well, we're three engineers short, but we don't have the budget for recruitment. Let's see if we can do it ourselves.’ Six months later, if you have an increase in breakdowns, output is reduced, which leads to customers fining you. These fines are more than what agencies would be charging.”

A seismic shift was accelerated due to the vote as well, as the market moved from being in favour of employers to being in favour of candidates. Companies evolved and adapted quickly to tap into the available talent pool. For example, logistics companies began offering up to £1,500 sign-on bonuses to sweeten their offers.

Another evolution came in the form of leaning into apprenticeships, which was accelerated by numerous pushes from Conservative governments. In a sector like engineering, this is seen as a good solution to a major problem. Estimates predict as many as 1 million vacancies in the UK by the end of the decade.

“Apprenticeships are great,” says Vanterpool. “However, we know a lot of people who go for apprenticeships. Four years later, they’re qualified, but they leave and get a new job with a pay rise. So you look at the original employers and understandably for them, it's a case of, ‘right, are we going to continue doing this?’”

Accelerated, not caused

A recent Manpower Group survey found that 73 per cent of UK employers said they are struggling to find the skilled talent they need. However, Vanterpool believes that Brexit cannot be fully blamed for our domestic skills shortage problem.

“It accelerated it and exposed it,” he says. “What people don't understand is that when we were part of the EU, people weren't coming over from the EU to just do the lower-level jobs. This talent was coming in with bachelor's degrees nine times out of 10 and master's degrees five times out of 10.

“They may have come and done that very briefly, but then very quickly progressed up through the ranks, went on to become middle management, senior management or leadership for these multi-million-pound businesses.”

As the effects of Brexit kicked in and the talent pool shrank, The Sterling Choice found opportunities and educated clients around a largely untapped talent pool: ex-military personnel. The company struck up partnerships with a variety of organisations that helped transition people from the forces into private work.

“A lot of the customers started to realise that whilst these individuals have no idea what it's like to be in a food factory,” Vanterpool says, “which runs at minus two degrees, what they did have was very strong education, qualifications and discipline. Your focus needs to be less on whether they are doing the job from day one. Rather, it's a case of how can we allot time and resource to help transition somebody from that military setup to a food factory?”

What this means for employers

The market now favours the candidate: Sign-on bonuses and counteroffers are the norm. Compete on speed and retention, not just salary, or you lose good people before you can hire them.

Pair apprenticeships with a retention plan: Training people who leave once qualified funds your competitors’ hires. Build progression and reasons to stay alongside the training.

Widen the definition of ‘qualified’: Ex-military recruits bring discipline and qualifications without sector experience. Investing in transition time opens a talent pool most employers overlook.